A Pair Of Analysts Cut Tesla Price Targets Ahead Of Q1 Deliveries

Tesla, Inc. TSLA received more bad news Monday when a pair of analysts became the latest to lower price targets for the struggling stock.

The Analysts

RBC analyst Joseph Spak reiterated his Underperform rating and cut his price target from $245 to $210.

JMP analyst Joseph Osha reiterated his Outperform rating but lowered his price target from $406 to $394.

The Theses

Tesla’s first-quarter deliveries expected out in early April will likely disappoint Wall Street, according to Spak. He cut his first-quarter unit sales estimate by 10 percent and lowered his margin guidance for Tesla due to the recent Model 3 price cuts.

“We see both 2019 and 2020 revenue as down vs. the 4Q18 run-rate and, given TSLA is priced for growth, believe the valuation will come in,” Spak wrote in a note. He also said Tesla’s inconsistent execution and legal troubles also create an overhang for the stock.

Osha is much more bullish, but has dialed back his target given the recent news.

“We are reducing our estimates for Tesla for 2019 and 2020, with an eye toward reflecting continued weakness in the U.S. market for the company’s products, as well as a partial retreat from the earlier plan to shut the dealership network down,” Osha wrote in a note.

He said JMP is still bullish on Tesla and nothing about the company’s near-term troubles change the company’s long-term trajectory.

Price Action

Tesla's stock traded lower by 3 percent at $256.90 per share Monday morning and are down 22.5 percent overall year to date.

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